Cooperative Patronage Refund Guidelines

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the total Gross Revenue from the operations listed?

P 3,000,000.00

P 5,000,000.00

P 4,000,000.00 (correct)

P 3,100,000.00

Which member received the highest total Patronage Refund?

Member D

Member E (correct)

Member B

Member A

What percentage of the total Net Surplus is allocated to the Statutory Fund?

40%

30% (correct)

20%

10%

What is the Rate of PR for Credit based on the provided amounts?

0.0504 Signup and view all the answers

What is the Total Expense for Labor and Other Operating Expenses combined?

P 2,700,000.00 Signup and view all the answers

How much was allocated for ISCPR from the Net Surplus after the Statutory Fund?

P 420,000.00 Signup and view all the answers

What is the Average Rate of PR calculated from the total PRs?

0.0588 Signup and view all the answers

What is the Rate of ISC based on the allocated amount?

0.0588 Signup and view all the answers

What is the minimum percentage of net surplus that must be allocated for patronage refund after deducting statutory reserves?

30% Signup and view all the answers

Which type of cooperative business activity exclusively entitles members to a patronage refund?

Lending Signup and view all the answers

If the rate of patronage refund exceeds twice the rate of interest on share capital, what must the cooperative do?

Adjust the rate of patronage refund Signup and view all the answers

What is included in the basis for computing patronage refund for trading/marketing activities?

Net Sales after accounting for returns and discounts Signup and view all the answers

Which of the following types of cooperatives requires separate recording of income and expenses per activity?

Multipurpose cooperatives Signup and view all the answers

Who is entitled to receive patronage refund in health service cooperative activities?

Members and non-members Signup and view all the answers

In the context of cooperatives, net surplus is defined as what?

Excess payments returned to the members Signup and view all the answers

What kind of fees in the labor service cooperative contribute to the computation of patronage refund?

Management fees collected from members Signup and view all the answers

What is the maximum allowable interest on share capital as per the Philippine Cooperative Code of 2008?

Equal to the normal rate of return on investments Signup and view all the answers

According to the guidelines, what is the minimum percentage of net surplus that must be allocated for patronage refunds?

30% Signup and view all the answers

What defines a patron in the context of cooperatives according to the guidelines?

Individuals who have availed the cooperative's products or services, regardless of membership Signup and view all the answers

What is the purpose of the General Fund as defined in the guidelines?

To set aside the proportionate amount of patronage refund for non-member patrons Signup and view all the answers

Based on the guidelines, how should patronage refunds be distributed among members?

In direct proportion to individual patronage of the cooperative's products and services Signup and view all the answers

What does the term 'net surplus' mean according to the guidelines?

Excess payments from members that are eligible for refund Signup and view all the answers

What is the role of the patronage refund principle as described in the guidelines?

To ensure equitable sharing of benefits by all patrons Signup and view all the answers

Which category of cooperatives is excluded from these guidelines?

Cooperative unions Signup and view all the answers

What is the first accounting entry to set up a patronage refund for members and non-members?

Net Surplus (Dr.) Signup and view all the answers

Which entry is recorded when unclaimed patronage refund or non-membership occurs?

Patronage Refund Payable (Dr.) / Reserve Fund/CETF (Cr.) Signup and view all the answers

What is a potential penalty for failing to comply with the provisions of these guidelines?

Imprisonment of at least one year Signup and view all the answers

What is the effectivity period stated in the guidelines?

15 days from publication Signup and view all the answers

What sanction can be imposed for willful violation of a lawful order by the Authority?

Dissolution of the cooperative Signup and view all the answers

What happens if any part of the Memorandum Circular is declared unconstitutional?

Only the affected parts are invalidated, others remain effective Signup and view all the answers

What is the central focus of Section 11 in the guidelines?

Recording accounting entries for patronage refunds Signup and view all the answers

Who is mentioned as the presiding officer in the regular meeting minutes of the CDA Board?

Hon. Orlando R. Ravanera Signup and view all the answers

What happens to the patronage refund of a member patron with paid-up share capital contribution if the by-laws specify it is to be credited to share capital?

It will be credited as part of the Capital Build-up. Signup and view all the answers

If a member patron has unpaid share capital subscription, what occurs with their patronage refund?

It is credited to their account until the subscription is paid. Signup and view all the answers

What condition must be fulfilled before a member patron's overdue obligations can be settled using their patronage refund?

The unpaid share capital subscription must be fully paid. Signup and view all the answers

For non-member patrons, how is patronage refund treated if they do not request to become a member within the specified time?

It is credited to the reserve fund or training fund. Signup and view all the answers

What is necessary for a non-member patron to become a member of the cooperative?

Requesting and complying with by-laws for admission. Signup and view all the answers

How does a member's share capital impact the treatment of their patronage refund upon voluntary withdrawal or involuntary termination?

It continues to earn interest until fully refunded. Signup and view all the answers

What happens to a non-member patron's refund if they fail to fulfill membership requirements after accumulating enough funds?

It is allocated to the reserve fund. Signup and view all the answers

Which of the following statements is true regarding the treatment of patronage refunds for unpaid share capital subscriptions?

They are credited to the member's account until paid. Signup and view all the answers

Study Notes

Patronage Refund Guidelines for Cooperatives

The Cooperative Development Authority (CDA) released Memorandum Circular No. 2019-09, outlining guidelines for allocating and distributing patronage refunds.
The legal basis for these guidelines is Article 86 of the Philippine Cooperative Code of 2008 and Rule 10, Section 14 of the Revised Implementing Rules and Regulations of RA 9520.
These guidelines apply to all types and categories of cooperatives except cooperative unions.
Patronage refund is a principle of equity where members equitably share benefits accruing from the cooperative.
The net surplus is not identified as profit but considered excess payments from the cooperative and returned to members.
The allocation process begins after allocating statutory funds and interest on share capital.
At least 30% of the net surplus, after deducting statutory reserves, must be allocated to patronage refund.
The rate of patronage refund cannot exceed twice the rate of interest on share capital.
Cooperatives record sales and receipts transactions separately for members and non-members.
For multi-purpose cooperatives, separate recording of income and expenses for each business activity is required.
Patronage refund calculation depends on cooperative business activities as reflected in the Statement of Operation.
The base for determining the patronage refund and who is entitled depends on the type of cooperative business activities.
The guidelines provide sample computation for patronage refund for multi-purpose cooperatives and individual patrons based on the type of business activity.
Patronage refund for member patrons with paid-up shares can be credited to their share capital or paid directly depending on the cooperative's by-laws.
For member patrons with unpaid share capital subscriptions, the refund is credited to their account until the subscription is fully paid.
Unpaid obligations of member patrons have a portion of the refund credited to their account until the obligation is satisfied.
Members that have withdrawn or been involuntarily terminated continue to earn interest on unpaid share capital, interest on share capital, and patronage refund until the amount is fully refunded.
Patronage refund for non-member patrons is set aside in a general fund and allocated upon request, accompanied with evidence of the amount of patronage.
Non-members who accumulate enough to become members can do so, depending on the bylaws and their request.
If non-member patrons have accumulated enough for membership but fail to become members, the accumulated amount is added to the reserve fund or education and training fund, at the cooperative's discretion.
Unclaimed patronage refund for non-members is credited to the reserve fund or education and training fund after notification to the non-member.
Accounting entries are outlined for patronage refund for members and non-members, including payment, membership, and unclaimed refunds.
Failure to comply with these guidelines can result in sanctions—including the non-issuance of the Certificate of Compliance (COC) for the following year and potential dissolution of the cooperative for wilful violations.
Failure to comply with CDA orders regarding these guidelines is an offense punishable by imprisonment or fines.
The memorandum circular takes effect fifteen days after publication in the Office of the National Administrative Register/Official Gazette.
The Board of Administrators approved the memorandum circular on July 15, 2019, during their regular meeting in Glan, Sarangani Province.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Explore the key concepts of patronage refunds in cooperatives as outlined by the CDA in Memorandum Circular No. 2019-09. Understand the legal foundations and the allocation process of surplus benefits among cooperative members. This quiz focuses on how cooperative members can equitably share the net surplus according to Philippine law.